Poverty exists around the world. It’s in developing countries as well as in the modern world. While the effects are often similar, the causes vary greatly from area to area. In China there is a unique set of circumstances leading to the current conditions.

Even with China’s recent improvement in poverty, there are still over 252 million people living on less than $2/day (that’s 6.5 times the population of California!). Most of them live in rural areas where even the best-intentioned policies fail to make a real impact.

This list is an overview of the major causes of poverty in China. It provides a high-level explanation of the most common causes of poverty in China today.

1. Rural-urban Migration

For the first time in its history, China became an urbanized country in 2012. That means the urban population (52%) is larger then it’s rural one. People are moving into urban centers at a record pace in search of high-paying jobs. While this creates a substantial amount of poverty in the cities with people taking underpaying jobs and increasing their cost of living substantially, the most severe poverty is in the rural areas. That’s where the ones left behind (women, children, elderly) now struggle daily to survive.

Read more about the rural-urban migration here.

2. Hukou System and Migrant Workers

The Hukou system is the household registration program in China. Among other demographics, it identifies every person as either rural or urban. The unfair and discriminatory system began in 1958 and is credited with preventing large slums from forming around major cities like those in India and Latin America. Today, though, it’s only a major barrier to economic reform and prevents migrant workers from receiving government provided services like healthcare, education and pension. Since these services are managed by regional governments, rather than the centralized national government, Chinese citizens are only eligible to receive the benefits from their local government. When they move, they are not eligible to receive benefits from their new regional government.

As an example, according to The Economist, “Shanghai had 170,000 students enrolled in high school in 2010, but there were 570,000 migrant children aged 15 to 19 living in the city who were unable to attend those schools.”

Read more about the Kukou System here.

3. Education Gap

Education is widely accepted as a key to eliminating poverty. The Chinese government recognized this in the 1980s and began a nine-year compulsory education system to cover kids from ages 6-15. The system has had some success for urban children, but has created a large divide between urban and rural students. Many of the urban students attend state-of-the-art facilities to learn from outstanding teachers. Rural children are subjected to deteriorating buildings, poor materials and substandard education. “Rural students stand virtually no chance when competing academically with their urban counterparts,” Jiang Nengjie, an independent filmmaker who make a documentary on these children, explained for an NY Times interview.

Education is also a benefit subject to the national family planning policy (One-child Policy) as well. There are exceptions, specifically in rural areas, but many families are still subject to the policy. If not exempt, only one child per family are eligible for government provided education. Additional education is the financial responsibility of the family.

Read more about China’s education gap here.

4. Access to Healthcare

Healthcare suffers from a similar challenge. While it is also considered a basic right under the Chinese constitution (along with education and social security), there is a disparity between urban and rural. While the central government provides some funding, most of the funding comes at the local government level. All of the administration comes from the local government. For families in the rural areas, their local government often is underfunded, medical clinics are few and far between, and the level of care is lacking.

5. Agricultural Lifestyle

Over two-thirds of China’s rural population make their living from farming, forestry or fishing. The poorer the household, the larger portion of income is derived from agricultural activities. With the urban migration of males, it leaves women and children to particularly vulnerable. Farming in rural China faces several challenges:

  • Remote locations without paved roads and poor markets
  • Unsafe drinking water
  • Naturally dry climate, over-cultivation and excessive demand on water and soil
  • Lack of skills and capacity
  • Reliance on traditional farming equipment and techniques

Project Partner exists to fight the Poverty Crisis created from the conditions above. While it’s a substantial challenge, we’re making an impact. You can read about our proven solutions that address each of these causes here.

8 thoughts on “5 Causes of Poverty in China

  1. Jayson Wang says:

    I don’t know when did you write this article,it just looks like very long time ago , The true is poor villages cannot afford good services and poor household and cannot afford the high costs of basic services,I agree with you.But Chinese are sharing a great effect to the World.China is the biggest productive country,the stock of money is ranked second,GDP gross rate is fourth,In export China is first etc.And you know how many people there,that’s not that easy my friend.

    • Kristen Levitt says:

      Jayson, thank you for your response. Yes, China is growing and developing rapidly. They have made great accomplishments over the years. It’s a great nation. Unfortunately, there is still much poverty today in rural China. We never mean this as criticism. It’s an opportunity for us to work together to make it even better.

  2. Kristen Levitt says:

    Jayson, thank you for your response. Yes, China is growing and developing rapidly. They have made great accomplishments over the years. It’s a great nation. Unfortunately, there is still much poverty today in rural China. We never mean this as criticism. It’s an opportunity for us to work together to make it even better.

  3. alex says:

    Great comment by both Jayson and Kristen. China has grown in leaps and bounds in the last 5 years. The number of billionaires has also grown by a large numbers. Like the old saying is the rich gets richer and the poor gets even poorer. The biggest problem that I see is the government not being able to control and manage the explosive growth in the economy, partly due to corruption by many high ranking officials within.the government. Thanks to the current Premier who dares to go up against these corrupted high ranking officials. It would take another 5 more years to erradicate these weeds both within China and many escapees abroad. Then China would be a better country. By the way, I am not a communist person. I enjoy the freedom lifestyle living in North America. However, too much freedom may not be a good thing either,. just look at the current leading Republician candidate for the US Presidential election. It’s a BIG JOKE – freedom of expressions being attack by freedon of assault approved and excouraged by the candidate, “Donald T” or look at Canada, many political parties are at each others throat, just for the purpose of getting into the power of governing, and not really for the interest of the people.

      • IdPnSD says:

        Please illustrate with an example to support your concept. For every win-win case you will always be able to find a third party, who will be the loser. Environment will be always the loser. Wealth is a physical property, if you take it then no other person can get it anymore. Thus win-lose is a law of nature. In physics it is called conservation law.

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